Streaming now represents a reported 14 percent of Xbox 360 time, 15 percent of PS3 time and 33 percent of Wii time. This growth is fueled by the availability of services like Netflix, Hulu, MLB Network and ESPN3. Time spent on game consoles in general is also on the rise. Metered console usage data from the first half of 2011 shows that the three platforms combined are up 7 percent in user time versus the year prior. Taken together, these findings suggest that streaming is incrementally adding to the time users are spending with consoles.

While the rise of streaming is evident across all three consoles, each maintains distinct usage characteristics. On a share basis, Xbox 360 is most notable for online gaming (34% of usage), PlayStation 3 is most notable for DVD / Blu-Ray viewing (22% of usage) and the Wii is most notable for offline gaming (55% of usage).

More insights on gamers, console dynamics and allocations of time and money within gaming and the broader entertainment category will be featured in the third annual Nielsen 360° Gaming Report: U.S. Market, available in early 2012. Additionally, an overview of key findings from the 2010 version of the report can now be downloaded here.

Survey conducted among a general population sample of n=3,000 in the United States, October 2011.

To help narrow the focus of this analysis, Nielsen filtered the field to those titles releasing on at least one of the three major consoles (Xbox 360, PlayStation 3, Wii) during the timeframe of late August to late November. This year’s list underscores the various interests of gamers—as well as the strength of video game brands. All but one of the Top 20 titles stem from a franchise, with brands such as Madden NFL and The Legend of Zelda dating back more than 20 years. Deep Silver’s Dead Island represents the lone new IP included on this year’s list.

Activision’s Call of Duty: Modern Warfare 3, an expected juggernaut for this holiday season, is desired by more than one quarter (27%) of active gamers. Microsoft’s Gears of War 3 and EA’s Madden NFL 12 follow closely behind; both titles were selected by nearly one out of every five (19%) active gamers. Apart from Gears of War 3 for Xbox 360, other platform exclusives expected to resonate strongly with consumers in the coming months include Nintendo’s The Legend of Zelda: Skyward Sword for Wii and Sony’s Uncharted 3: Drake’s Deception for PS3.

Nielsen’s Top 20 Games to Watch is supplemented by information from NM Incite, a Nielsen McKinsey company, which analyzed the primary elements driving consumers’ online conversations around each title. Recent consumer buzz shows that those anticipating Ubisoft’s Assassin’s Creed: Revelations are excited for the return of multi-player functionality to the franchise, while gamers looking forward to Warner Bros Interactive’s Batman: Arkham City are speculating on the villains they’ll face in the new title. Fans of EA’s FIFA franchise are hoping for more pro and career mode options in the upcoming iteration, and those addicted to Microsoft’s Dance Central are rejoicing in the news that they’ll be able to import tracks from the original title into the sequel.

While Action/Adventure games hold the most spots in the Top 20, the list is a testament to the diverse interests of today’s gamers—from the intense action of First Person Shooters like Square Enix’s Deus Ex: Human Revolution, to the energetic enthusiasm of Music / Rhythm games such as Ubisoft’s Just Dance 3, to the epic sense of adventure in Bethesda’s RPG Elder Scrolls V: Skyrim. Sports and racing titles like 2K’s NBA 2K12 and EA’s Need For Speed: The Run are represented as well.

Amidst many questions about how the next console transition will play out, Nintendo prepares to share details about its new console at E3 2011 next week. According to the opinions of gamers, expressed in both surveys and online chatter, anticipation is high for Nintendo to deliver as it has so successfully with the Wii since that initial reveal six years ago.

To put some context around Nintendo’s plans to launch a new console, Nielsen surveyed gamers about their expectations for and interest in buying a variety of assumed or rumored new gaming platforms to be released in the near future. Almost half of gamers (47%) expect Nintendo to release its new console (known as Wii 2, Wii’s successor or Project Café) within the next two years, surpassing the many other assumed or possible options. This likely reflects rumors of its pending announcement and alleged features such as HD display and controllers that include an embedded touch screen. It may also speak to some latent demand for Nintendo to delight gamers once again. Far less has been said publicly about new consoles from Microsoft and Sony but confidence is reasonably high that they will release these in the near future as well.

Beyond expectations, nearly a quarter of gamers say they would buy a new console from Nintendo (27%) within six months of release, but a near-equal share say the same for new Sony and Microsoft consoles. A second tier of interest contains all of the iOS devices and gaming handhelds (13% – 18%). These figures are driven partly by the current installed bases of precursor devices and the profile of the gamer for each. As a result, Nintendo’s comparatively larger Wii audience is behind much of the interest in the new Nintendo platform. The sheer size and diversity of this audience speaks to the opportunity and challenge for Nintendo in converting Wii gamers to a new platform.

To illustrate this potential challenge more fully, interest in the new Nintendo console among more hardcore, multi-platform Wii gamers is instructive. These are gamers who have experience on both the Wii and an alternative console (Xbox 360 or PS3). These groups voice greater interest in a new Microsoft or Sony console than in one from Nintendo, which could be explained by a number of factors including comparative use or satisfaction with the precursor consoles, time since purchase of precursor consoles, prioritization of a “primary” console based on the precursors, and value considerations. Uptake among these audiences will ultimately depend on the actual features, price point, and timing of release for the Nintendo console, versus satisfaction with currently owned platforms and other new system options.

In a positive sign given what is at stake for Nintendo, online discussion points to heightened anticipation for Nintendo’s console versus the major hardware unveils of E3 2010 at the same time last year. Overall buzz about E3 is up dramatically year-over-year (59% increase), with the new Nintendo console accounting for 22 percent of total messages this year, compared to 4 percent in 2010 for Microsoft’s hands-free gaming add-on Kinect, which was unveiled at the show last year. Much of the increase in overall chatter is coming from Twitter this year versus last (29% of Pre-E3 buzz in 2011 vs. 8% in 2010).

Trended buzz shows a substantial increase in interest generated by rumors and confirmation of the new Nintendo console seven to five weeks pre-E3. This is especially so compared to 2010 buzz for Kinect and Nintendo’s own 3DS handheld, which was unveiled last year at E3 as well. In the past several weeks the differences in chatter have narrowed, though it remains to be seen if any more key buzz-driving information will be released before the much-anticipated unveiling.

On the whole, half of the latest breed of gaming consoles (known to the industry as 7th Generation Consoles) are located in the living / family room. The system most likely to be found in this family-friendly space is the Wii (59%), a reflection of the Nintendo console’s motion-controlled, social gaming style. Comparatively, the Xbox 360 and PlayStation 3 platforms are less likely to reside in the living room, though as more consumers purchase the Kinect for Xbox 360 and PlayStation Move motion peripherals, look for this to potentially change moving forward.

Beyond the living / family room, the next most popular location for consoles is decidedly more solitary: the bedroom, with one in five systems residing in kids’ bedrooms specifically. Here, the Xbox 360 clearly leads the way, with 28% of the Microsoft system’s units located in kids’ rooms, nearly double the rate for Wii (14%) or PS3 (16%). The master bedroom is home to another 10% of 7th Gen systems, with a number of other household locations accounting for the balance of platforms.

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Download a recording of the recent webinar, U.S. Gaming: A 360° View, covering this and other highlights from the second annual Nielsen 360° Gaming Report: U.S. Market. Contact us for the full report, which includes more insights on gamers, console dynamics, and gaming in the context of the broader entertainment category.

It appears that while overall leisure budgets increased year-over-year, not all media and entertainment categories benefited equally. Out of home activities (such as dining out) and cell phone-related entertainment saw gains, but at the expense of video games and other forms of entertainment. While the share of the leisure budget dedicated to video games decreased slightly, the number of actual dollars reportedly spent on video games was nearly even in 2010 versus 2009. Amidst a rising tide in overall leisure spending, standing still or losing dollars added up to a smaller share of wallet for video games, movie-going, DVDs / Blu-rays, music and print media.

Shift in Budget… or Screen?
How do we explain the growth in spending on out-of-home activities and cell phone-related entertainment? The first is a likely barometer of improving overall consumer confidence while the second may reflect a broader shift toward mobile in how consumers invest their media and entertainment dollars. Given the popularity of games as a paid form of content on mobile devices (Angry Birds, etc.), it stands to reason that some of the spending traditionally earmarked for non-mobile video games shifted to cell phone-related entertainment but is likely still within the gaming umbrella. The same logic may apply to the other categories that experienced slight declines in share. The screen is shifting but the content may be the same.

Video game buyer households account for 26 percent of U.S. homes, roughly even with 24 percent in 2009.The chart shows share of monthly leisure spending among them for the biggest shifting categories in 2010 versus 2009. Despite the proportionally smaller investment in gaming in 2010, the category still earned a larger slice of entertainment spending among these households than other TV-based entertainment options, including subscribing to premium TV packages and DVD / Blu-ray related-spending. In addition, this data was collected before the holiday season was over and thus may not be a harbinger of things to come as momentum builds from Kinect’s successful launch in November and as a strong slate of releases becomes available to potential buyers this spring.

The lack of consistency in shifts across categories suggests this is a trend to watch. In theory, a change in overall leisure spending, up or down, need not have any impact on share devoted to each category but it clearly did in 2010 versus 2009. Some of this can be attributed to cyclical sentiment and behavior shifts during a recessionary period. However, a deeper look suggests structural changes across media and entertainment, such as the rise in mobile spending will continue an elaborate tug-of-war among screens and categories for share of wallet.

For the past two years Nielsen has interviewed more than 3,000 US consumers to gain insight into entertainment choices through the lens of gaming. Complete data and analysis on share of wallet across all categories as well as other findings on gaming can be found in the full 360° Gaming Report.  Join us for the webinar U.S. Gaming: A 360° View, on March 16th covering the state of the U.S. video game industry.

*Video game buyer households are defined as spending $1+ per month on any of new games, used games, peripherals, rentals, periodicals, subscriptions to online services, downloads, pay-as-you-go games, etc.

Fully 87 percent of users age 13+ say they have played video games of some kind for Xbox 360 and Wii, with 80 percent saying they have done so for PlayStation 3. Much of this is the result of traditional offline play, but nearly half of Xbox 360 and PlayStation 3 users say they play games online. With this in mind, what share of time do both offline and online gaming account for across these consoles? On average, Xbox 360 users claim to spend 62 percent of their time with the system on gaming, with online play accounting for nearly the same share as offline. Comparatively, PlayStation 3 users spend just under half of their usage time gaming, and engage relatively more in offline vs. online play than Xbox 360 users. This difference between the relative proportion of online play for Microsoft and Sony’s consoles likely reflects a number of intertwined factors, such as timing of console launch, profile of players and console exclusives. Overall, what sets Xbox 360 apart from the other two consoles is the total share of time devoted to online play.

The second-most popular use of consoles is for watching DVDs/Blu-Rays, most noticeably for PlayStation 3 but also for Xbox 360 (DVD playback is not a standard feature on the Wii). Sony has made a point of emphasizing the Blu-Ray functionality in marketing for the PlayStation 3 since its launch in 2006, given the company’s broader interest in seeing that technology succeed. In terms of share of time, PlayStation 3 users indicate that DVD/Blu-Ray viewing occupies 27% of their time with the console, which is on-par with offline gaming and, in fact, surpasses online gaming. However, by comparison, DVD viewing occupies only 11% of time on an Xbox 360 (Blu-Ray format is not supported by Xbox 360). In sum, the PlayStation 3 stands out for its use as a DVD/Blu-Ray player as well as a gaming console.

After gaming and DVD/Blu-Ray viewing, roughly a quarter of users say they have used a variety of applications. The most notable in terms of contribution to console usage time is video-on-demand and streaming services such as Netflix, MLB Network and ESPN3, accounting for 20 percent of Wii users’ time, 10 percent of Xbox 360 users’ time and 9 percent of PlayStation 3 users’ time. What explains the Wii’s edge here and usage profile in general? Compared to the other two consoles, the bulk of time on the Wii is in the form of offline gaming; the system trails in use for online play. This may reflect the lesser emphasis on online applications and gameplay for the Wii in general. In terms of streaming, Netflix was introduced this year for the Wii, but its lead in share is likely a function of the fewer hours per user that is being divided up, as detailed below. Overall, the Wii is most defined by its use for traditional offline gaming.

All of the analysis of console time up to this point has looked at consumer-reported share of time rather than electronically measured hours. Though a different data source, metered console usage data can help us understand how big the pie is that is being sliced for each console. Indeed, the total amount of time in hours differs markedly by console. Users 13+ spend 4.9 total hours per week on the Xbox 360, 4.1 hours on the PlayStation 3 and 1.4 hours on the Wii. Males drive these averages for all three consoles, surpassing females in time spent. These differences in time, coupled with the nuances in how that time is allocated, underscore the unique profile of use for each console.

More insights on gamers, console dynamics, and allocations of time and money within gaming and the broader entertainment category will be featured in the second annual Nielsen 360° Gaming Report: U.S. Market, available January 2011.

Across a multitude of electronic offerings, the Apple iPad leads all devices (31% interest in future purchase) among American kids ages 6-12. Apple’s iPod Touch is also popular choice among kids, generating similar levels of interest as computers. Of note, the iPod Touch outpaces the perennial handheld gaming favorites Nintendo DS and Sony PlayStation Portable – though look for the Nintendo 3DS to make a splash with young gamers when it releases in Spring 2011. Among gaming consoles, kids indicate they will be requesting the Sony PlayStation 3 the most this year; however, the platform will be competing with a variety of equally-popular mobile devices.

For the rest of U.S. consumers, electronic upgrades look to be a popular trend this year, with future interest in commonly owned devices such as computers, televisions, and smartphones outpacing other electronic offerings among consumers ages 13+. Kids aren’t the only ones interested in the iPad: fully 18% of the 13+ population is also eyeing this hot new offering. The emerging technologies offered by Blu-Ray players and E-Readers also have good traction with teens and adults.

Beyond these products, gaming devices appear to be ready for another solid holiday showing. Console interest among ages 13+ is led by the Nintendo Wii (15%) and Sony PlayStation 3 (13%), which both maintain an edge over the Microsoft Xbox 360 (9%). Much has been made of new motion peripherals from Sony (Move for PlayStation 3) and Microsoft (Kinect for Xbox 360), and these gadgets garner sizeable interest (9% and 8%, respectively) – though of note, interest was gathered prior to Microsoft’s recent large-scale media campaign for Kinect, which launched in the U.S. on November 4.

Given the continued pressure on consumer spending, it is difficult to know how robust a holiday season this will be for tech devices, but this survey suggests the electronics aisle will be heavily traveled this season.

More insights on gamers, console dynamics, and allocations of time and money within gaming and the broader entertainment category will be featured in the second annual Nielsen 360° Gaming Report: U.S. Market, available in January.

At Nielsen, we have our eyes trained on every media screen possible when it comes to advertising effectiveness. Knowing that gamers are among the most engaged consumers when playing an online or console game, we’ve been looking closely at the impact of in-game ads on their buying habits. Recently, we worked with game maker Electronic Arts Inc. (EA) on behalf of Gatorade to see how their in-game ads drove offline sales. Our study found that that in-game advertising increased household dollars spent on Gatorade by 24%, and offered a return on investment of $3.11.

This is the first time that this type of sales lift analysis has been done for advertising within video games and it’s all part of our efforts to help marketers better understand the potential of advertising in the gaming space. In this case the story is simple – dollars put into video game product placement result in more retail dollars.

How the Study Worked
The study focused on households that purchased at least one of six EA SPORTS™ titles: NHL® 09, NHL 10, NBA LIVE 07, NBA LIVE 08, NBA LIVE 09 and NBA Street Homecourt. Gatorade had a variety of product placements within the games including arena signs, players’ water bottles, score updates and other call outs.

Using Nielsen’s consumer panel of more than 100,000 U.S. households, including a subset of homes that scanned video game UPC barcodes, we were able to compare the households that purchased at least one of the studied games before and after Gatorade branding was integrated into the games (the test group) with households that didn’t purchase one of the games (the control group).

Americans spend nearly a quarter of their time online on social networking sites and blogs, up from 15.8 percent just a year ago (43 percent increase) according to new research released today from The Nielsen Company. The research revealed that Americans spend a third their online time (36 percent) communicating and networking across social networks, blogs, personal email and instant messaging.

“Despite the almost unlimited nature of what you can do on the web, 40 percent of U.S. online time is spent on just three activities – social networking, playing games and emailing leaving a whole lot of other sectors fighting for a declining share of the online pie,” said Nielsen analyst Dave Martin.

Additional findings include:

• Online games overtook personal email to become the second most heavily used activity behind social networks – accounting for 10 percent of all U.S. Internet time. Email dropped from 11.5 percent of time to 8.3 percent. (Source: Nielsen NetView)
• Of the most heavily-used sectors, Videos/Movies (which includes video-specific and movie-related websites only – and is not inclusive of video streaming behavior elsewhere) was the only other to experience a significant growth in share of U.S. activity online. Its share of activity grew relatively by 12 percent from 3.5 to 3.9 percent. (Source: Nielsen NetView)
• June 2010 was a major milestone for U.S. online video as the number of videos streamed passed the 10 billion mark. The average American consumer streaming online video spent 3 hours 15 minutes doing so during the month. (Source: Nielsen VideoCensus)
• Despite some predictions otherwise, the rise of social networking hasn’t pushed email and instant messaging into obscurity just yet. Although both saw double-digit declines in share of time, email remains as the third heaviest activity online (8.3 percent share of time) while instant messaging is fifth, accounting for four percent of Americans online time. (Source: Nielsen NetView)
• Although the major portals also experienced a double digit decline in share, they remained as the fourth heaviest activity, accounting for 4.4 percent of U.S. time online. (Source: Nielsen NetView)

Email Remains Top on Mobile Internet Activities
The way U.S. consumers spend their Internet time on their mobile phones paints a slightly different picture to that of Internet use from computers. In a Nielsen survey of mobile web users, there is a double-digit (28 percent) rise in the prevalence of social networking behavior, but the dominance of email activity on mobile devices continue with an increase from 37.4 percent to 41.6 percent of U.S. mobile Internet time.

Portals remain as the second heaviest activity on mobile Internet (11.6 percent share of time), despite their double digit decline and social networking’s rise to account for 10.5 percent share means the gap is much smaller than a year ago (14.3 percent vs. 8.3 percent).

Other mobile Internet activities seeing significant growth include music and video/movies, both seeing 20 percent plus increases in share of activity year over year. As these destinations gain share, it’s at the cost of other content consumption – both news/current events and sports destinations saw more than a 20 percent drop in share of U.S. mobile Internet time.

“Although we see similar characteristics amongst PC and mobile internet use, the way their activity is allocated is still pretty contrasting, added Martin. While convergence will continue, the unique characteristics of computers and mobiles, both in their features and when and where they are used mean that mobile Internet behavior mirroring its PC counterpart is still some way off.”

NOTE: This piece of research looked at the share of all U.S. Internet time each of the 84 “standard” NetView subcategories/sectors holds. Only the top 10 sectors were actually called out, the remaining 74 were grouped into “other” and not called out.

The Mobile Internet data is derived from a survey which tracks self-reported mobile internet usage from over 5,000 respondents each month.  Mobile internet universe is defined as people that they have used the mobile internet, email or instant messaging on their mobile phone in the past 30 days. The Mobile internet data is weighted back to benchmarks for age, gender, income, race/ethnicity and operator share collected in Mobile Insights.

After a long wait, those fans will see the first major update to the game (StarCraft II: Wings of Libery) debut this week. Based on U.S. data from Nielsen’s metered PC panel, there has been a monthly average of 180,000+ unique players since January 2008. And the game’s engagement metrics are also notable, with average weekly gameplay still clocking in at over four hours per week. Significantly, StarCraft fans are also quite loyal to publisher/developer Activision/Blizzard – the top two alternately played games from these players are the game maker’s World of Warcraft and Warcraft III: Reign of Chaos.

Rooted in real-time strategy gameplay (where players determine the timing, growth, advancement and positioning of units/soldiers) StarCraft was cited as redefining the genre by including three distinct races : Protoss, Zerg and Terran. The game also was responsible for the large growth of Blizzard’s Battle.net service, which hosts the multiplayer component of play. What can the video game market, Activision/Blizzard and fans of the game expect from StarCraft II: Wings of Liberty? For starters, this first of three installments will be more focused on the Terrans, which represent the exiled human race. The single-player campaign will take on a non-linear path, which is a departure for typical Blizzard games. Additionally, the game will feature a much more robust multiplayer offering than the original game.

According to Nielsen Video Game Tracking data, interest in the title skews slightly more male than for a typical game with the largest over-index observed for males 25-54 at about 44% of likely buyers (compared to approximately 31% for a given video game included in tracking). This older skew fits in logically, as big portions of the fan base have been playing the game over the past twelve years, and have moved beyond the teenage years and early adulthood.

Anticipation for StarCraft II: Wings of Liberty is clearly high as judged by the high propensity of interested buyers to claim they have already pre-ordered the game or will buy it during the first week of release. 43% of interested buyers fall into this category, which is substantially higher than the norm of 16%. When focusing on just males 18-34 that number jumps even higher to 53%. Additionally, online buzz about the game spiked when the release date was announced in early May and has trended up closer to the actual release.